Robots Will Soon Do Your Taxes. Bye-Bye, Accounting Jobs

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Robots Will Soon Do Your Taxes. Bye-Bye, Accounting Jobs

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Tax season has arrived, as the Super Bowl recently reminded us: In the first half alone, two commercials encouraged viewers to trust computers to do our taxes, the first from H&R Block with its new partner Watson, and the second from TurboTax with its friendly talking tax bot.

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Vasant Dhar (@ProfDhar) is a professor at the Stern School of Business and the Center for Data Science at NYU. He is chief editor of the Big Data journal.

Machines won't be able to automatically file taxes with the IRS for a few years. But do these commercials signal that robots can come close, requiring fewer human experts, mostly for sanity checks? Is another human profession on the verge of biting the dust?

It sure seems that way. As my research shows, robots are best-suited to predictable tasks when the cost per error is low. As a task becomes less predictable and a robot makes more mistakes, the automation is worth it only if those mistakes don't carry significant costs. For example, driverless cars make few errors, but those mistakes can be expensive and deadly. In contrast, most tax return decisions, especially the simpler ones, aren't terribly risky, as they're based on massive amounts of historical data on which the machine learns to anchor its decisions.

Take the automobile analogy: Carmakers have gradually integrated more automation into sensing, braking, and acceleration decisions. Cars are taking over navigation with the expectation of that function becoming fully autonomous at some point. Similarly, humans are likely to get more and more comfortable with machines helping us with taxes. Eventually, many of us will probably trust them enough to compose the entire return for us to sign.

More than 2 million people were employed as accountants, bookkeepers, and auditors in 2015. Until now, these types of information-oriented professions have resisted automation because they require managing unstructured data emanating from the real world, making judgments, and dealing with actual people. What's different now, however, is that artificial intelligence's perceptive capabilities have improved. Machines can now handle images, sounds, and text in a way that enables them to ingest and analyze data at high volume, without making costly mistakes. Between accounting professionals and truck drivers alone, about 4.5 million human jobs could be ceded to robots over the next few years.

The larger question here is whether this is a harbinger for the future of other major human occupations, the top 10 of which account for roughly 25 million jobs in the United States. Will these new AI machines put other major human professions at risk as well? Will a robot replace me— teaching my class on data science? Somewhat ironic, but a potential reality.

In the past when technologies have displaced laborious tasks, they've also made humans more productive and created new jobs that leveraged the novel capabilities of these technologies. Railroads created more opportunities to deliver goods to consumers, while computers created new kinds of office jobs involving the creation and use of information.

But this time it could be different. Historically, machines have been designed to solve specific problems, but now they can now learn autonomously, improving their decision-making while interacting with the real world and collecting data through increasingly sophisticated sensory capabilities. When we get accustomed to accommodating the machines' occasional mistakes, occupations that have been firmly human—like driving vehicles or preparing taxes—become robotic.

This gets us to a larger, vexing question regarding employment. President Trump has promised to promote policies and create incentives to bring back jobs to the US. Even if he succeeds in bringing business back, the headwinds being created by AI do not mean that large numbers of jobs will be created in the process. If anything, the increasing comfort that humans have with accommodating the expanding capabilities of robots in our everyday lives might just make the creation of human employment that much more challenging going forward. It sure feels like robots are coming for many of our jobs, even mine.